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Valuation Guide

Previously the building had a restaurant bar on the ground floor, dance hall on the second floor, restaurant on the third floor and 95 hotel rooms above the fourth floor. Currently, every floor has been cleared out and available for complete renovation.

Mid Range Valuation Based on Projected Revenues

In general, Macau hotel rates range from 700-2500 MOP per night.

On average, with 1500 MOP per night, the hotel has a maximum revenue potential of 142,500 MOP per night or about 52,000,000 MOP per year based on full occupancy, excluding the shop spaces on the ground floor and all expenses and costs.

Square Footage

The property has approximately 3601.79 square feet per floor. With 9 floors, the total gross square footage is approximately 32,416.11 square feet.

Room Rates for 2013

Room rates rose fastest in mid-range hotels in the first half of this year, Macau Hotel Association data show.

The average cost for a night in a four-star hotel rose by 4.4 percent from a year earlier and the average cost of a night in a three-star hotel rose by 5.1 percent.

The average cost of a five-star hotel room was MOP1,687 (US$211) in the first half of this year, 0.2 percent more than a year earlier.

A night at a five-star hotel last month was on average 3.8 percent higher than a year earlier, while the average room rate in hotels with fewer stars was more than 12 percent higher.

Although it costs more to stay at a five-star hotel, the first-half average occupancy rate of five-star hotels rose by 1.5 percentage points to 86.4 percent.

First-half average occupancy rate dropped in hotels with fewer stars.

 

Background

Macau became a Special Administrative Region of China in 1999. Like Hong Kong, it retains much of its historic political governance structure and economic system. Its chief executive is appointed by Beijing. Gambling revenues reportedly amounted to $23.5 billion in 2010, and direct taxes on gambling account for well over half of all government revenue. Manufacturing of textiles and garments, once the mainstay of the economy, has largely migrated to the mainland. Macau’s currency enjoys full convertibility with the Hong Kong dollar, which is pegged to the U.S. dollar.

Rule of Law

Macau has its own judicial system with a high court; the legal framework is based largely on Portuguese law. Property rights and commercial contracts are secure, but enforcement of intellectual property rights remains weak and inefficient. The government’s image has been damaged by corruption scandals and rising popular discontent linked to the perception that the growth of gambling has not benefited society more widely.

Limited Government

The top income tax rate is 12 percent, and the top corporate tax rate is 39 percent. Gambling tax revenues are quite high, and overall tax revenue is equal to 31.4 percent of GDP. Government spending is equivalent to 16.8 percent of total domestic output. Gambling revenue has outpaced the growth of public spending, generating considerable surpluses.

Regulatory Efficiency

The overall regulatory environment lags behind similar economies in efficiency. License requirements vary by type of economic activity, but general business activities such as retail, wholesale, and business consultancies do not require a license. The continuing lack of a dynamic and broad-based labor market is due in part to the absence of serious reform efforts. Monetary stability has been relatively well maintained.

Open Markets

The trade regime is open, with no tariffs imposed on imports and relatively low interference resulting from non-tariff barriers. The government does not officially discriminate between foreign and domestic investors, but there are a few restrictions in services markets. A relatively small financial sector, dominated by banking, provides easy access to financing. Capital markets remain underdeveloped.